Question
The total book value of WTCs equity is $15 million, and book value per share is $30. The stock has a market-to-book ratio of 1.5,
The total book value of WTCs equity is $15 million, and book value per share is $30. The stock has a market-to-book ratio of 1.5, and the cost of equity is 10%. The firms bonds have a face value of $12 million and sell at a price of 110% of face value. The yield to maturity on the bonds is 6%, and the firms tax rate is 40%. What is the companys WACC?
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Corporate Finance Reader
Authors: Robert W. Kolb
2nd Edition
1878975536, 978-1878975539
